W.Va. governor signs budget that taps reserves

CHARLESTON, W.Va. (AP) - West Virginia Gov. Earl Ray Tomblin signed a budget into law Wednesday that dips into millions of dollars in state reserves but gives public employees raises.

Before approving the plan, the Democratic governor vetoed about $67 million in 42 spending areas to limit how much the state dips into its savings. Senior services, local economic development and other programs will see some funding scaled back but not deleted.

“Some of these reductions curb grants and services and, while they are difficult, they are necessary to responsibly manage future year budgets, without raising taxes,” Tomblin wrote in his veto letter.

The proposal that lawmakers passed last week would have taken $147.5 million from the state’s $922 million last-resort account. Senate Finance Committee Chairman Roman Prezioso, D-Marion, said another bill cutting horse- and dog-track subsidies, and other areas, could keep another $21 million in the Rainy Day Fund. That proposal awaits the governor’s signature.

Tomblin raised concerns that the state’s bond ratings could suffer in the long run if it draws that much from savings. Instead, Tomblin reduced next year’s dip into reserves to $100 million.

The 2015 fiscal year will be the first where the state patches its budget with the Rainy Day money. Tomblin expects the state to keep drawing more reserves to balance its budget through 2018.

Tomblin Deputy Chief of Staff Jason Pizatella said the state is expecting another dismal budget in 2016 and could need $150 million to $170 million to balance its next budget.

New tax dollars weren’t a possibility, because House lawmakers opposed bringing in more money by raising cigarette, sales and other taxes. Each of the House’s 100 members is up for re-election, and Democrats are clinging to a six-seat edge over Republicans.

“Without a tax increase or other revenue source, and absent the action I am making today, (the budget) will drop the Rainy Day Fund below what is considered the recommended threshold of 15 percent (of general revenue) down to 11.5 percent in three fiscal years,” Tomblin wrote in his veto letter Wednesday.

The budget includes $504 raises for public employees. It also accounts for $1,000 across-the-board raises for teachers and 2 percent raises for school service personnel, which were included in a separate bill.

The biggest line-item veto took $47.6 million from a medical services trust fund, which Tomblin said will be restored to Medicaid later.

Tomblin also took $3.5 million out of $19.5 million lawmakers budgeted for in-home care for seniors. Pizatella said more than 1,000 seniors are on a waiting list for the program, and next year’s budget would still cover 335 of them.

Tomblin said the state needs to determine whether Medicaid expansion and other aspects of the Affordable Care Act would affect use of the in-home program.